New Delhi, June 9 -- InCred has reiterated its preference for private sector banks over public sector undertakings (PSU banks), citing structural strengths, better margin management, and more attractive risk-reward dynamics in a declining interest rate cycle. The brokerage's stance is grounded in a combination of profitability resilience, strategic positioning, and valuation considerations-particularly when assessed through the lens of the Price-to-Earnings Growth (PEG) ratio.

One of the primary reasons InCred favours private banks is their superior ability to protect net interest margins (NIMs) in a falling interest rate environment. Private lenders, InCred says, enjoy a relatively stronger starting point in terms of margins and possess...